객관식
The Times Interest Earned (TIE) ratio is computed as:
192
views
14. Financial Statement Analysis
Ratios: Times Interest Earned (TIE)
객관식
The Times Interest Earned (TIE) ratio is calculated by dividing EBIT by which of the following?
A
Total liabilities
B
Interest expense
C
Total assets
D
Net income
검증된 단계별 안내1
Understand the Times Interest Earned (TIE) ratio: It measures a company's ability to meet its interest obligations using its earnings before interest and taxes (EBIT).
Identify the formula for TIE ratio: The formula is \( \text{TIE} = \frac{\text{EBIT}}{\text{Interest Expense}} \).
Clarify the components: EBIT stands for Earnings Before Interest and Taxes, and Interest Expense refers to the cost incurred by the company for borrowed funds.
Determine the denominator: The denominator in the TIE ratio is Interest Expense, as it represents the amount the company needs to cover with its earnings.
Review the options provided: The correct answer is Interest Expense, as it aligns with the formula \( \text{TIE} = \frac{\text{EBIT}}{\text{Interest Expense}} \).
관련 영상
관련 실천
